Commission seeks to stop ‘terror charities’

The European Commission has recommended that charities based in member states should have to take part in a formal registration process as part of an initiative against their funds being diverted to terrorists.

European Voice

12/7/05, 5:00 PM CET

Updated 4/12/14, 12:07 PM CET

In a new paper, the EU executive says that while charities carry out "vital humanitarian and other much-needed public work", there is evidence that some "have been exploited for the financing of terrorism and for other criminal ends".

As a result it urges that "publicly accessible registration systems" should be operated for all charities, wishing to benefit from tax exemptions, avail of public sector grants or undertake fundraising. The charities would also have to produce annual financial statements on income and expenditure, as well as "full and accurate audit trails of funds" that they hand over to others.

"Simplified accounting and reporting requirements" could be applied to small charities, it says.

The proposal suggests, too, that a network of police contact points should be set up to investigate any suspicions that the money of charities could be siphoned off to terrorists. OLAF, the Commission's anti-fraud office, could "fulfil a particular role in this co-operation", it says.

A grouping of development aid, human rights and environment organisations recently compiled a response to the Commission's proposals.

The grouping said that it "welcomed all efforts to promote transparency" in the non-profit sector. Yet it said that no evidence had been produced to suggest that misuse of charities by terrorists was "more than a marginal problem". They also expressed concern that the Commission's proposals could raise suspicions about the activities of charities and have counter-productive effects, as well as causing an "excessive administrative burden" for many organisations.

Since the 11 September 2001 attacks, the US has frozen the assets of several European organisations accused of financing Islamic extremists.